Major International Business Headlines Brief::: 20 May 2022

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Major International Business Headlines Brief::: 20 May 2022 

 


 

 


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ü  Canada to ban China's Huawei and ZTE from its 5G networks

ü  Cyber security: Global food supply chain at risk from malicious hackers

ü  Russian McDonald's buyer to rebrand restaurants

ü  Australia election 2022: Cost of living worries voters

ü  Royal Mail warns it will put prices up again

ü  Nigeria: Ogun Begins Laying of 5,000 Fibre Optic Cable to Boost Internet
Connectivity

ü  Nigeria: Despite June 1 Deadline, Enforcement of Commercial Motorcycles'
Ban Continues, Says Lagos Government

ü  Nigeria: Naira Weakens to N600/$ At Parallel Market As Politicians Mop Up
Dollars

ü  Rwanda: How MTN Rwanda Has Fared Since Debuting on Stock Exchange

ü  Rwanda: Budget - MPs Outline Their Priorities on Govt Spending

ü  Africa: Nigerian Tech Startup Pricepally Tackles Rising Food Costs With
Bulk-Buying Platform

ü  Elon Musk hits back at 'despicable' attacks against him 

ü  Analyst Warns Of A Fuel Shortage Crisis In The U.S.

ü  UK inflation hits a 40-year high. So what next?

ü  Sarb hikes repo rate by 50bpsIn the wake of spiking global inflation.

 

 

 

 

 

 

 

 

 

 

 

 


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Canada to ban China's Huawei and ZTE from its 5G networks

Canada says it will ban two of China's biggest telecoms equipment makers
from working on its 5G phone networks.

 

The restrictions against Huawei and ZTE were announced by the country's
industry minister on Thursday.

 

Francois-Philippe Champagne says the move will improve Canada's mobile
internet services and "protect the safety and security of Canadians".

 

Several nations - including the UK, US, Australia and New Zealand - have
already put restrictions on the firms.

 

The four countries, along with Canada, make up an intelligence-sharing
arrangement named 'Five Eyes'. It evolved during the Cold War as a mechanism
for monitoring the Soviet Union and sharing classified information.

 

Canada's announcement was widely expected, as its allies had already barred
Huawei and ZTE from their own high-speed networks.

 

Speaking to reporters in the Canadian capital of Ottawa, Mr Champagne said
the decision came after "a full review by our security agencies and
consultation with our closest allies".

 

"Let me be very clear: We will always protect the safety and security of
Canadians and will take any actions necessary to safeguard our
telecommunication infrastructure," he added.

 

"In a 5G world, at a time where we rely more and more in our daily lives
[on] our network, this is the right decision."

 

A spokesperson for the Chinese embassy in Ottawa told the Reuters news
agency that Beijing sees the security concerns raised by Canada as a
"pretext for political manipulation".

 

The spokesperson for China also accused Canada of working with the US to
suppress Chinese companies.

 

The Chinese embassy in Ottawa, Huawei and ZTE did not immediately respond to
BBC requests for comment.

 

5G, or fifth generation, is the next upgrade to mobile internet networks,
offering much faster data download and upload speeds.

 

It also allows more devices to simultaneously access the internet.

 

It comes as data usage is soaring, as the popularity of video and music
streaming grows. This is pushing governments and mobile phone network
operators to improve their telecommunications infrastructures.

 

The Canadian government's decision means that telecoms firms in country will
no longer be allowed to use equipment made by Huawei and ZTE.

 

Companies that have already installed the equipment made by the Chinese
manufacturers must now remove it, Mr Champagne said.

 

Canada first announced a review of Huawei equipment in September 2018.

 

Some of China's biggest technology and telecoms firms have been targeted in
recent years by governments in the US and other Western nations over
national security concerns.

 

In November, US President Joe Biden signed legislation that stops companies
judged to be security threats from receiving new telecoms equipment licences
in the country.

 

It means equipment from Huawei, ZTE and three other Chinese companies are
banned for use in US telecoms networks.-BBC

 

 

 

Cyber security: Global food supply chain at risk from malicious hackers

Modern "smart" farm machinery is vulnerable to malicious hackers, leaving
global supply chains exposed to risk, experts are warning.

 

It is feared hackers could exploit flaws in agricultural hardware used to
plant and harvest crops.

 

Agricultural manufacturing giant John Deere says it is now working to fix
any weak spots in its software.

 

A recent University of Cambridge report said automatic crop sprayers, drones
and robotic harvesters could be hacked.

 

The UK government and the FBI have warned that the threat of cyber-attacks
is growing.

 

John Deere said protecting customers, their machines and their data was a
"top priority".

 

Smart technology is increasingly being used to make farms more efficient and
productive - for example, until now the labour-intensive harvesting of
delicate food crops such as asparagus has been beyond the reach of machines.

 

The latest generation of agricultural robots use artificial intelligence,
minimising human involvement. They may help to plug a labour shortage or
increase yield, but fear of the inherent security risk is growing, adding to
concern over food-supply chains already threatened by the war in Ukraine and
Covid.

 

Chris Chavasse, the co-founder of Muddy Machines, which is trialling an
autonomous asparagus-harvesting robot called Sprout, said: "There is a real
risk that people anywhere in the world could try and take control of these
machines," he said. "to get them to do whatever those people want, or just
prevent them from operating."

 

He said potentially someone could drive Sprout into a hedge or a ditch, or
prevent it from working at all, so they are working with security
researchers to address any vulnerabilities.

 

Asparagus farming is unlikely to be a prime target, but Mr Chavasse believes
malicious hackers could threaten "mission critical" agricultural
infrastructure.

 

Even the largest companies aren't safe from cyber gangs. Some use
ransomware: malicious code that can encrypt data and lock systems.

 

Last year, one of the world's biggest meat processing company, JBS, paid
$11m in ransom to resolve a cyber attack. This month, top US agriculture
firm, AGCO, was hit by a ransomware attack that affected production.

 

In April, a group of official governmental cyber security authorities
including ones from the UK, US and Australia, warned that Russian
state-sponsored hackers could target supply chains as a vital part of
Western national infrastructure.

 

One self-styled ethical hacker, who goes by the name Sick Codes and asked to
remain anonymous, told the BBC he had discovered weaknesses in John Deere's
software, which he had reported. He said he found a way to access company
information and machine data through websites and apps.

 

Sick Codes said he had also found vulnerabilities in systems used by CNH
Industrial, which manufactures New Holland Agriculture machinery.

 

He fears it's just a matter of time before a sophisticated hacker finds
critical vulnerabilities and causes major disruption to already vulnerable
food supply chains.

 

"That's what we're trying to prevent - stalling something during the most
important times, particularly seeding or harvesting. If you can't move your
tractor during that time, or if you can't pick or take the crop out of the
ground, you can imagine what happens. It just stops, the whole thing," he
said.

 

James Johnson, John Deere's global chief information security officer, told
the BBC that the company had been liaising with a number of ethical hackers
on vulnerabilities they have found.

 

He said those found so far by Sick Codes did "not pose a threat to customers
or their machines".

 

He added, "No company, including John Deere, is immune to vulnerabilities,
but we are deeply committed and work tirelessly to safeguard our customers,
and the role they play in the global food supply chain."

 

A spokesperson for CNH Industrial said it took security very seriously, and
added: "We continuously invest in improving our security posture."

 

Benjamin Turner, chief operating officer at Agrimetrics, one of four UK
government-backed agri-tech centres of agricultural innovation, sad:
"Hacking into one tractor, you can upset a farmer and maybe damage their
profitability for a season.

 

"Hacking into a fleet of tractors, suddenly, you've got the power to affect
the yield in whole areas of the country."

 

Meanwhile out in the fields, even everyday farm machinery uses systems that
are potentially vulnerable.

 

Richard Heady, a beef and arable farmer in Buckinghamshire whose tractor can
be steered by a GPS positioning system, said: "Everything is so interlinked
now, just by bringing down one system it can stop deliveries coming to us or
stop tractors moving at all. If we are in a busy harvesting window we can't
just have tractors sitting around.

 

"We have seen empty shelves because of Covid - we could see the same thing
happen if we get a cyber attack."-BBC

 

 

 

Russian McDonald's buyer to rebrand restaurants

McDonald's has found a local buyer for its Russian business, after the war
in Ukraine pushed it to quit the country.

 

Alexander Govor, who currently operates 25 McDonald's restaurants in
Siberia, will take on the firm's restaurants and staff, operating them under
a new brand, the fast food giant said.

 

It did not disclose the sale price, but has warned investors it would take a
more than $1bn hit from the exit.

 

McDonald's had operated in Russia for more than 30 years.

 

The opening of its first restaurant in Moscow in 1990 came to symbolise a
thaw in Cold War tensions.

 

A year later, the Soviet Union collapsed and Russia opened up its economy to
companies from the West. More than three decades later, however, it is one
of a growing number of corporations pulling out as the war in Ukraine and
Western sanctions make it difficult to operate.

 

McDonald's, which had nearly 850 restaurants in the country, most of them
directly owned, said it expected the deal, which is subject to regulatory
approval, to close in coming weeks.

 

Mr Govor has been a licensee of McDonald's since 2015. He is also co-founder
of Neftekhimservice, a refining company, and a board member of another firm
that owns the Park Inn hotel and private clinics in Siberia.

 

Russia's Industry and Trade Minister Denis Manturov said the deal was the
result of a "long and difficult" negotiation process and the government
would provide Mr Govor with all the necessary assistance to set up
operations.

 

The terms provide for McDonald's 62,000 staff in Russia to be retained for
at least two years, with their existing pay and Mr Govor will pay the
salaries of corporate staff in Russia until the deal is completed.

 

McDonald's will retain its trademark in the country, it said, while the
restaurants will be stripped of their menu, logo and other branding.

 

Announcing plans for the sale earlier this week, chief executive Chris
Kempczinski called the decision "extremely difficult".

 

"However, we have a commitment to our global community and must remain
steadfast in our values. And our commitment to our values means that we can
no longer keep the arches shining there," he said.

 

McDonald's suspended operations at the restaurants it owned in Russia in
March, citing the "humanitarian crisis" and "unpredictable operating
environment" caused by the Ukraine war.

 

The move drew outrage among Russian politicians and prompted threats the
business would be seized.

 

A patent application for an "Uncle Vanya" restaurant chain was filed with
Russian authorities shortly after. The name, the same as the famous work by
Russian playwright Anton Chekhov, was one of several brand knock-offs of
Western companies to surface.

 

Last year, Russia and Ukraine accounted for about 9% of McDonald's revenue.

 

The move by McDonald's came after French carmaker Renault sold its majority
stake in carmaker Aftovaz to a state research institute for a symbolic sum,
while its Renault Russia business was taken over by the city of Moscow.
Manufacturing at the Renault plant is expected to resume under a Soviet-era
brand.-BBC

 

 

 

Australia election 2022: Cost of living worries voters

Across Australia household budgets are being tightly squeezed, with the cost
of living soaring to an eye-watering 21 year high.

 

Rising prices will be a pivotal concern for voters as they head to the polls
on Saturday.

 

Although not surging as high as in other countries at 5.1%, Australia's
inflation rate is outstripping wage growth (2.3%) meaning people have less
money in their pockets every month.

 

In the Sydney suburb of Lakemba, 12 kilometres (seven miles) from the centre
of the nation's biggest city, almost everyone I meet is worried about the
rising cost of rent, food, fuel, and other essentials.

 

"I am a single mum with two kids. The childcare - everything - is very
expensive. (It is) stressful sometimes," says Diana, who lives nearby.

 

Meanwhile, at a busy grocery shop she runs on the main street, Summer Hamze
is organising deliveries. She tells me that many of her customers can barely
keep up with the price rises she's forced to pass on from her suppliers.

 

"With the inflation, actually, we do need the government to get that under
control because it is out of control," she tells the BBC. "It is just rising
and rising and rising, and people are getting really scared these days."

 

Given inflation is largely being driven by market forces such as higher
global shipping and energy prices, in Lakemba, opinion is divided over how
much can be done by the next government.

 

"It is in their hands, because they know the economic factors, everything,"
says one man. "So, they know how to handle the situation."

 

Whereas another passer-by disagreed.

 

"Nah, I don't think anyone can do anything," he says. "Even if they change
the government, I don't think anything will happen because the banks will do
their thing."

 

Earlier this month, Australia's Reserve Bank (RBA) increased interest rates
(by 0.25% to 0.35%) for the first time in more than 11 years - the first
hike in the middle of an election campaign since 2007.

 

Rates were held at historic lows during the Covid-19 pandemic in a bid to
encourage Australians to keep spending. But as inflation surges and the
economic recovery post-Covid gets underway, the RBA is applying the brakes
to stop the economy overheating. It is making money more expensive to
borrow.

 

More interest rate increases are expected in the months ahead. That's good
for savers, but it's estimated that 300,000 Australians could default on
their mortgages as repayments increase.

 

So, whichever candidate wins the election at the weekend they will have to
navigate choppy economic waters.

 

Scott Morrison, the prime minister, whose centre-right coalition has been in
power for almost a decade, has slammed his main challenger, opposition
candidate, Anthony Albanese, as a "loose unit" on the economy

 

"It is like he just unzips his head and let's everything fall on the table.
That is no way to run an economy," thundered Mr Morrison.

 

In response, Labor leader Anthony Albanese said the Australian economy was
"crying out for leadership and reform" but was getting neither from the
current administration. Mr Albanese wants an increase to the minimum wage of
at least 5.1%, to keep pace with inflation.

 

Almost two-thirds of Australians say reducing the cost-of-living should be
the top priority for the next government, according to recent analysis.

 

Professor Nicholas Biddle from the Australian National University (ANU) says
rising prices were "high on the minds" of many voters of various political
persuasions.

 

"This outranks all other major policy considerations," he says.
"Interestingly, we found this was a view held by people who said they would
vote for Labor, for people who said they would vote for (Scott Morrison's)
Coalition and for those who weren't planning on voting for either party".

 

Fixing Australia's nursing home system for older peopleand strengthening the
nation's economy were the other top priorities among more than 3,500 voters
surveyed by the ANU.

 

Key economic decisions have been outsourced to independent bodies (such as
the RBA, which sets official interest rates), or are dictated by the demand
and supply of goods and services, both in Australia and overseas.

 

But the national government does wield considerable influence on the fate of
the economy through its tax and spending policies, for example. Massive wage
subsidies and other stimulus measures during the darkest days of the
pandemic did protect jobs and businesses in Australia.

 

However, with three-year parliamentary terms in Canberra, some academics
argue that federal politicians can be distracted by almost constant
electioneering and exaggerate their control over the economy.

 

"One of the problems Australia has is its short parliaments, which means
they are almost perpetually in this cycle of gathering votes.

 

"If a government is always worrying about the political cycle then when do
they have time to knuckle down and really get things done," says Michelle
Baddeley, a professor of economics at the University of Technology, Sydney.

 

"I think, yes, there is a bit of claiming more ground than they really can
control," she says. "The reality is a bit of a mixture because certainly,
and Covid illustrated this pretty well, governments can do a lot in terms of
spending money to generate employment in the short-term."

 

Australia has a small, open economy that thrives on confidence.

 

And ultimately, it's individuals that collectively power an economy, but
governments with vision are able to foster enterprise, innovation, and
prosperity.

 

"There is a lot of catching up to do in terms of growth, in terms of
opportunity, and, indeed government can set the pace," explains Peter
Khoury, from the NRMA, a large motoring and transport company.

 

"As long as there is confidence in the economy and in the strength of the
economy, Australian entrepreneurs and businesses will invest."

 

"Economically speaking, Australia will come out of Covid better than most
countries. So, you don't want to miss that opportunity," he adds.

 

Australians voters will soon decide who they trust to help steer their
country through the recovery - and beyond - for the next three years.-BBC

 

 

 

Royal Mail warns it will put prices up again

The prices of parcels and stamps are likely to rise again as Royal Mail
tries to cover higher costs, including wages, energy and fuel expenses.

 

The firm said it would try to "mitigate" the costs through "price increases
and growth initiatives".

 

Earlier this year, the firm hiked first class stamp prices by 10p to 95p and
second class stamps by 2p to 68p.

 

The warning comes after Royal Mail warned it was facing "significant
headwinds" from rising costs.

 

It said it will need to cut costs more as a result, increasing its target to
over £350m from £290m previously.

 

A spokeswoman said: "We haven't made decisions on future prices, but we
always carefully consider the impact on our customers and ensure that any
changes help to secure the sustainability of the Universal Service."

 

 

Royal Mail said it was also continuing to change the business to cope better
as its parcel business becomes more important than letter delivery.

 

Letter volumes have fallen by more than 60% since their peak in 2004-05 and
by about 20% since the pandemic began. Meanwhile, parcel deliveries
increased during the pandemic.

 

Simon Thompson, chief executive of Royal Mail, said: "As we emerge from the
pandemic, the need to accelerate the transformation of our business,
particularly in delivery, has become more urgent.

 

"Our future is as a parcels business, so we need to adapt old ways of
working designed for letters and do it much more quickly to a world
increasingly dominated by parcels."

 

Mr Thompson said that the focus would now be to "work at pace" with staff
and trade unions to "reinvent this British icon for the next generations",
give customers "what they want" grow the business sustainably and "deliver
long-term job security".

 

The price hike warning came as the business reported an 8.8% drop in pre-tax
profit to £662m for the year to the end of March.

 

Royal Mail is also facing an ongoing pay dispute with its largest labour
union.

 

In January it said around 700 management roles would be cut. The company
also axed a fifth of its managers - around 2,000 posts - in June 2020,
shortly after the start of the pandemic.

 

Earlier this year the company was heavily criticised for delivery
disruptions over Christmas and January. Citizens Advice estimated that 2.5
million Royal Mail customers didn't receive important documents such as
health appointments, fines or bills.

 

Royal Mail said the wave of Omicron infections meant that thousands of staff
members had to take time off over Christmas and January. But it said the
"vast majority" of post was delivered on time.-BBC

 

 

 

Nigeria: Ogun Begins Laying of 5,000 Fibre Optic Cable to Boost Internet
Connectivity

The Ogun State Government has begun laying of 5000 kilometre fibre optic
cable that would link the 20 local government areas of the state.

 

The laying of the cable, was part of the three main areas in which the state
was deploying resources for of Information and Communication Technology
(ICT) infrastructure.

 

The Special Assistant to the Ogun State Governor on ICT, Mr. Olakunle
Akinbola, disclosed the efforts of the government at opening of a worship on
ICT/E-Commerce Value Chain for stakeholders.

 

The workshop sponsored by a German Development Agency, GIZ, organised in
collaboration with the Bureau of Information. Technology (BIT), Ogun State,
had stakeholders from Academia, Chambers of Commerce, business community,
ICT companies and Government Agencies.

The workshop was organised under the heading, " Pro-Poor Growth and
Promotion of Employment in Nigeria Programme- known as SEDIN."

 

Akinbola, who disclosed that the state, had laid about 2000 kilometre optic
cables, said the essence of the project, was to make internet connectivity
available to all local governments in the first instance.

 

He said: "The essence of the project is to have internet connectivity across
the state.

 

"The idea is that as soon as we get into local governments, from each local
government, we can now go into phase two of the project, which is to deliver
the fibre connectivity to schools and hospitals so that those establishments
can enjoy internet connectivity.

 

"We can then open the door for private sector to come in to deliver the last
mile. What we mean by the last mile is the connectivity from the local
government to offices and homes.

"What that will do is that it will open internet to everyone in the state
and you can imagine the impact that will have in terms of investors coming
in to the state and the people of the state, small and medium enterprise
being able to enjoy internet connectivity. The benefits are just endless."

 

Speaking on the workshop, the Head of Component, Local Economic and Value
Chains, GIZ, Sina Uti-Waziri, said the ICT Value chain in Ogun State was not
only because of its high employment and income potential, but also because
of the important of the moving forward into the future.

 

Uti-Waziri, in a remark delivered virtually said: "ICT and digitalisation
from what we can see will continue to grow and will continue to be a
potential for our youth to be employed and it will be the anchor around
growth, around business growth, around economy and about society or making
new opportunities."

 

She said: "We will seek your cooperation for the government personnel for
the programme and the private sector in growing and making use of new
opportunities in the areas of business services and also marketing
potential.

 

"We are looking at how to connect stakeholders. Where can we connect the
personnel, where can we connect the academia, for example to make sure that
everybody is part of the broad process."

 

While also speaking, the Managing Director of Bariansystems LTD and
Consultant to the GIZ on the project, Jude Okfita, said the programme was
aimed at developing the value chain or enhancing the value chain in ICT and
e commerce sector of this state.

 

He said, "GIZ is interested in raising Micro Small and Medium Enterprises
(MSMEs), that can scale up from where they are currently to the next level.
>From level zero to One or wherever they are to the next level."-This Day.

 

 

 

Nigeria: Despite June 1 Deadline, Enforcement of Commercial Motorcycles' Ban
Continues, Says Lagos Government

The seizure of commercial motorcycles by the Lagos State Task Force will
continue, despite the June 1 deadline issued by Governor Babajide Sanwo-Olu
for them to leave six local government areas, the state government explained
yesterday.

 

The State's Commissioner for Information and Strategy, Mr. Gbenga Omotoso,
disclosed this in a statement.

 

The six local governments are: Eti-Osa, Ikeja, Lagos Island, Lagos Mainland,
Apapa and Surulere.

 

The statement noted that the deadline does not invalidate the provisions of
the Lagos State Transport Sector Reform Law of 2018, which states that "no
persons shall ride, drive or propel a motorcycle or tricycle on a major
highway within the State, and any person in contravention of this provision
commits an offence," and would be made to face the wrath of the law.

The Lagos State Task Force, led by CSP Shola Jejeloye, has continued to
enforce the law.

 

"It seized 238 motorcycles in Lekki on Tuesday and Wednesday. In Iba on
Lagos-Badagry Expressway, where it was violently resisted today, the Task
Force seized 195 motorcycles. The riders were operating on highways and
bridges in flagrant disobedience of the law because, according to them, they
are free to ply unauthorized routes till June 1.

 

"This is wrong. The February 1, 2020 directive has not been reversed. The
enforcement was weakened by COVID-19, which affected all areas of life. Now,
the action is being reinforced.

 

"The government praises Lagosians who have come out to support the ban on
commercial motorcycles in the six local government areas, which Governor
Sanwo-Olu has described as the "first phase" of the action triggered by
safety and security concerns," it added.

Meanwhile, the Lekki Phase 1 Residents Association (LERA) has also announced
ban on commercial motorcycle operators, otherwise known as Okada riders, in
the area.

 

The Chairman of LERA, Mr Yomi Idowu at a press briefing yesterday, appealed
to the Lagos State Government to enforce the law banning Okada riders in the
state.

 

Idowu also called on the Ministry of Physical Planning and Urban Development
and the New Towns Development Authority (NTDA) to flush out hoodlums and
miscreants in uncompleted buildings within the community.

 

"Indeed, Okada has been an environmental nuisance and many residents have
had their fair share of their sheer recklessness. It is an obvious fact that
security within Lekki Phase I has deteriorated.

 

"It is of utmost importance that we all take a collective stance and
formulate joint initiatives to avert a total exposure to imminent security
threats to the lives and assets of our residents," he stated.

 

He described the killing of the sound engineer, David Imoh in Lekki as
dastardly, animalistic and senseless.

 

"Intelligence report reaching us is that following the raid on Okada riders
and subsequent seizure of their bikes in Lekki Phase 1 by officials of Lagos
State Taskforce, the riders, who believe the action was instigated by Lekki
residents, are planning to attack the residents," he said.

 

He described as worrisome the menace of Okada riders which recently led to
bloody robbery incidents, kidnappings, assassinations and ritual killings to
name a few.

 

A member of the Board of Trustees, Chief Emeka Nweze said those who
patronise the 'okada riders' are not homeowners, rather domestic workers and
people working on sites.

 

Nweze called on the state government to ensure those who have undeveloped
properties start working on them immediately or have them confiscated.-This
Day.

 

 

 

Nigeria: Naira Weakens to N600/$ At Parallel Market As Politicians Mop Up
Dollars

Politicians stocking up dollars ahead of political parties' primary
elections over the weekend have driven the naira to a new low of N600 to a
dollar on the parallel market.

 

A Bureau De Change (BDC) operators, Abubakar Mohammed, confirmed the current
rate of the greenback to Bloomberg. The present parallel market rate is the
lowest the currency has traded this year.

 

The official naira rate was N415.95 as of Wednesday. The parallel market
thrives on shortages, which has helped drive the gap in the two rates to
above 40 per cent.

 

Politicians competing for support from delegates in the party primaries are
creating massive demand for dollars in cash, Mohammed said by phone.

"Demand is not going to abate soon, which means more pressure for the naira,
and also because dollar supply is very low," he said.

 

Former governor of Anambra state and a presidential aspirant under the
Peoples Democratic Party (PDP), Mr. Peter Obi, recently expressed worry over
the diminishing value of the naira.

 

Obi who was guest on the 'Morning Show' on Arise Television, while speaking
on the decreasing value of the nation's currency on the parallel market,
said one of the most important ingredients of a nation was the respect
people have for their currency.

 

"Currency is the measure of faith and trust of citizens of a nation, it is
the measure of productivity. It is very worrisome that government officials
who are supposed to be the protector of our local currency have abandoned
the currency and are now spending dollars.

 

"I find it worrisome that while our manufacturers, business people are not
getting dollars to bring in critical goods into our country, the politicians
have enough dollars to share and these people are those who have no
legitimate means of earning this dollar," he said.

 

Obi lamented that the country's politics has remained largely transactional.

 

Nigeria's two major political parties, the ruling All Progressives Congress
(APC) and the main opposition, the PDP, plan to hold primary elections to
decide legislative, governorship and presidential candidates from the
weekend to early June.

 

The country would elect a new national leader in February 2023, to replace
Muhammadu Buhari, who ends his second four-year tenure in May.

 

Spokespersons for the two parties didn't immediately respond to calls
requesting comment.

 

Politicians in Nigeria have a history of buying votes at party primaries
going as far back as the 1993 elections, Director of Abuja-based Centre for
Democracy and Development, Idayat Hassan said.

 

He added: "I think we're just seeing the beginning of rise of the dollar
because as we move closer to the primaries and the parties are trying to put
their houses in order, the value of the dollar will also trade up."

 

The Central Bank of Nigeria (CBN) could be forced to devalue the naira if it
continues to weaken in the parallel market. The banking sector regulator has
done so three times since March 2020, in a bid to curb demand and close the
gap between the official and unauthorised rate.

 

The central bank should improve supply of the greenback rather than suppress
demand, the President of the Association of Bureau De Change Operators of
Nigeria, Aminu Gwadabe, said by phone.

 

There is a "lack of confidence in the local currency," Gwadabe said.-This
Day.

 

 

 

Rwanda: How MTN Rwanda Has Fared Since Debuting on Stock Exchange

MTN Rwanda this month marked one year since its listing directly on Rwanda
Stock Exchange (RSE). The telco listed on May 4, 2021, with 20 per cent of
shares being held by the public.

 

In the first year at the RSE, the firm's stock price remained stable
standing at Rwf179 per share as of May 16. The share price stability has
been driven by performance in 2021 and first quarter of 2022.

 

At the end of 2021, MTN Rwanda reported an after-tax profit of Rwf22.4
billion, an increase by 10.9 per cent compared to the year before.

 

In the first three months of 2022, service revenue increased by 24.5 per
cent to Rwf50.9 billion year-on-year in the first quarter of 2022.

>From the latest quarterly report (Q1, 2022), all the telco's revenue
streams, data, voice, Mobile Money and enterprise maintained positive growth
year-on-year, according to the quarterly report released on May 5.

 

Voice remained the largest driver of revenue accounting for 43.6 per cent of
total revenue, growing by 11.7 per cent drawing from last year's decision to
make permanent the offer to allow subscribers to use any voice bundle to
call other mobile networks in Rwanda at no additional cost.

 

Data revenue maintained its positive momentum rising by 13.8 per cent led by
a combination of increased subscribers and usage, highlighting a traffic
increase by 33.3 per cent, and generally contributing to 17.1 per cent of
service revenue.

 

According to the report, mobile subscribers increased by 306,000 in the
first quarter, representing 5 per cent growth in subscribed people compared
to March 2021.

MTN Rwanda's wholly owned subsidiary company, Mobile Money Rwanda Ltd's
revenue recorded a growth of 54.5.per cent from their leading service Mobile
Money.

 

This plays an important role in financial inclusion in Rwanda as driven by
an increase of 12.1 per cent of Mobile Money users, bringing the penetration
to 3.8 million.

 

The telco also reported growth in subscriber base to 6.5 million people is
driven by the stabilization of distribution network following the
introduction of new sim registration guidelines that slowed down the
customer base growth in the last quarter of 2021.

 

Mitwa Ng'ambi, CEO of MTN Rwanda, said: "The Rwandan economy was fully
opened in Q1 following Covid-19 related restrictions in previous quarters,
underpinning the positive month-on-month commercial and financial momentum
which has translated into encouraging results."

"The rest of the year will see us investing in innovation and network
capacity to meet the growing needs of our customers, while also managing
costs to maintain healthy margins," she added.

 

Mark Nkurunziza, MTN Rwanda Chief Finance Officer, said the net finance
costs increased by 105 per cent on the back of additional debt raised to
support the license renewal resulting into a Profit after Tax decline of
39.6 per cent closing at Rwf4.1 billion.

 

"Nevertheless, we remain encouraged by the top line growth and impact of our
cost efficiencies program which we believe will continue to improve our
margins," he said.

 

The Board of Directors, on March 7, approved that the dividend payment will
be made by June 30, to all shareholders on the share register by June 9,
subject to shareholder approval at the Annual General Meeting on June 2.

 

Meaning that dividends at Rwf4.98 per share will be distributed, totaling
approximately Rwf6.7 billion representing 30 per cent of the net profit made
in 2021.

 

In support to Rwanda's ambition of cashless economy, the telco noted that it
will expand its Mobile Money product portfolio to further drive the uptake
of digital products and services tailored to customer needs leading to
growth in data usage.

 

Last year also had its share of challenges where the telco faced customer
complaints regarding the quality of network quality especially for voice.

 

Rwanda Utilities Regulatory Authority (RURA) issued an Enforcement Notice
which was extended to March 31, 2022. MTN Rwanda demonstrated significant
improvement made and continues to engage with the regulator.

 

In the first quarter of the year, MTN recognized and provided financial
support to twenty female-led cooperatives through the annual Connect Women
in Business initiative, which was launched in conjunction with the Ministry
of Gender and Family promotion.

 

The telco also continued to build on its goal to achieve net zero carbon
emissions by 2040, through the installation of a solar power pilot at its
main data centre. The success of this pilot will see the company offloading
more of its power needs into this renewable energy source through the
year.-New Times.

 

 

 

Rwanda: Budget - MPs Outline Their Priorities on Govt Spending

Members of Parliament have said that the proposed Rwf4.6 trillion national
budget for the 2022/23 fiscal year should focus on areas such as addressing
the rising cost of living, supporting school feeding as well as narrowing
the country's import bill.

 

The proposed budget represents an increase of Rwf217.8 billion or 4.7 per
cent of public spending compared to Rwf4.44 trillion of the revised budget
of the current fiscal year.

 

The draft budget was presented by Uzziel Ndagijimana, Minister of Finance
and Economic Planning, to both Chambers of Parliament on Thursday.

On the expenditure front, the recurrent budget is projected at Rwf2.79
trillion while development budget and net lending is projected at Rwf1.86
trillion.

 

While presenting the proposed financial plan to legislators, Ndagijimana
said that the next financial year budget, which will start on July 1, will
focus on the implementation of the government's strategies meant to speed up
economic recovery from the Covid-19 pandemic.

 

It also emphasises continued implementation of the ambitious national
strategy for transformation (NST1) -- a seven-year government programme
running from 2017 through 2024.

 

Like most of the global economy, Rwanda faces two major challenges--the
negative effects of the Covid-19 pandemic, and the Russia-Ukraine war, which
has triggered a surge in prices of goods and services

 

Other challenges are climate change which might hamper agriculture output.

Here is what MPs think the projected budget should prioritise:

 

On addressing the rising cost of living

 

MP Christine Mukabunani said the increasing commodity prices are making life
difficult for citizens.

 

Also, she said that there are still people who have not yet been paid
compensations for their expropriated properties for a period up to 10 years.
Pointing out that it is high time they got their payments to be able to cope
with the rising cost of living.

 

"Second, there is an issue of small salaries especially for teachers. Isn't
there anyway that the salaries of teachers should not be taxed, so that they
get their whole pay," Mukabunani said.

 

MP Jean Claude Ntezimana said that the Rwandan franc has been losing value
against the dollar; wanting to know what was being done to address the
issue.

 

On prices on the market, he wondered why they continue a growing trend.

"Though it was said that it (inflation) is at 10 percent, I think it is
higher," he said

 

"For instance, [cooking] gas prices continue rising. The Government should
put in efforts for the gas price to go down," he observed, calling for
supporting the made in Rwanda programme to reduce imports.

 

Minister Ndagijimana said that a currency is a product like any other and
has its own market, pointing that the exchange rates are determined by the
demand and supply.

 

In the current situation where imported goods are expensive, he said, the
result is that the amount of US dollars needed to pay imports rise which
increases the value of the dollar against the local currency.

 

He noted that the Government was working to ensure that the depreciation of
the franc against the dollar does not exceed the recommended limits.

 

On the rising cooking gas prices, he said that the Government was regulating
the prices of imported product, while exploring the use of methane gas from
Lake Kivu for cooking and powering factory operations in the country in the
long run.

 

Ensuring food security

 

Thanks to the strategic food reserve, MP Theoneste Safari Begumisa said, the
country was able to provide food relief to needy people who were affected by
the Covid-19 pandemic.

 

"Food security should be given much attention, with focus on commodities
that can be kept safely for long [such as grains and cereals]," he said.

 

MP Pierre Claver Rwaka said that irrigation efforts were still small
compared to the required pace to ensure sustainable food security. For
instance, he cited Bugesera District, which has good access to water, but
suffers from drought [that results in crop failure].

 

Commenting on this subject, Minister Ndagijimana said that food security is
important to the country, and that increasing agricultural production is a
government priority.

 

"We will ensure the availability of farm inputs [including seeds and
fertilisers], and expand the irrigated area," he said.

 

"Especially for livestock, we will put in more efforts in vaccination in
order to protect them from diseases," he said.

 

Tackling the rising cost of fertilisers

 

MP Damien Nyabyenda talked about the high fertiliser prices, suggesting that
the organic waste being generated countrywide should be turned into manure
to foster crop growth.

 

Currently, with the fertiliser prices - which are subsidised by the
Government - local farmers have to pay Rwf768 for a kilogramme of urea,
representing an increase of 26.5 percent from the Rwf564 they had to pay in
July 2021. For DAP, a kilogramme is priced at Rwf832, or a rise of 23.9
percent from Rwf633, while that of NPK 17:17:17 rose by 19 percent to Rwf882
from Rwf713 in the same period.

 

Minister Ndagijimana said that the Government has been supporting farmers by
subsidizing the fertiliser prices so that they are not overwhelmed by them.

 

He indicated that there are some initiatives that have started to make
manure from organic waste across the country, adding they will continue in
order to supplement chemical fertilisers in increasing farm productivity.

 

Reducing Rwanda's imports to save its franc

 

MP Ntezimana said that the Made in Rwanda programme is needed as it has
proven to promote import substitution.

 

However, he said that the prices of the products made in the country are
still high, which threatens their competitiveness compared to imported
products.

 

"For this to be achieved, the local businesses should be supported,
including reducing taxes on the locally made products so that they become
affordable," he said, calling for booting exports.

 

MP Pie Nizeyimana said that it is good that the country's economy is
expected to grow by 6 per cent in 2022. However, he expressed concerns over
the volatility in the currency market, which has seen the franc lose ground
against major international trading currencies.

 

For instance, in 2017 the US dollar was exchanging for Rwf838, but currently
trades Rwf1,031.

 

He called for strategies to address the problem, am0ong them, by
establishing a single EAC single currency to reduce reliance on foreign
currencies.

 

Addressing gaps in school feeding

 

MP Jean Damascène Murara wanted to know which efforts the Government said
will invest in school feeding in the next fiscal year budget.

 

"When you look at the meals the students get at school, you realise that
they are lacking in nutrients. During our recent [parliamentary] tours,
there are schools we visited and found that it was not satisfactory,

 

"What is the Ministry of Finance and Economic Planning's plan to increase
the funding for school feeding so that students get adequate food," she
asked the Minister.

 

Senator Ephrem Kanyarukiga said that lack of access to food results in some
children dropping out of school as they are weak in class and they fail to
follow lessons, yet their parents cannot afford school feeding costs.

 

"The government should prioritise school feeding in its education planning,"
he said, adding that the Government should revise its contribution to this
programme because it was not reflecting the current market realities.

 

Currently, the government provides Rwf56 per student's meal per day, which
some parliamentarians have constantly said is small.

 

Ndagijimana said that the government is to support the school feeding
initiative, but observed that parents should play a greater role in the
feeding of their children at schools.

 

Education support, with focus on TVET

 

MP Mediatrice Izabiliza said that education should be supported, especially
by availing teaching aids mainly for hands-on skill acquisition in the
Technical and Vocational Education and Training (TVET) establishments.

 

Minister Ndagijimana said that such needs will be catered for in the budget,
pointing out that TVET consumables such as timbers for making furniture and
metallic materials needed for welding practices will be increased.-New
Times.

 

 

Africa: Nigerian Tech Startup Pricepally Tackles Rising Food Costs With
Bulk-Buying Platform

Johannesburg — Shopping for food in Nigeria's largest cities can be a
challenge. After battling the notorious traffic of Lagos or Abuja to reach
open-air markets, many shoppers are frustrated to find that the foods on
offer are very expensive and that prices are rising all the time.

 

The Nigerian tech startup Pricepally  offers another option. It connects
customers in two of Nigeria's largest cities with farm-fresh food at lower
prices, delivered to their homes within a day or two.

 

Visit  Prosper Africa   to access U.S. Government trade and investment
support and browse the Virtual Deal Room  with curated investment
opportunities, including companies like Pricepally.

 

Through a website and mobile app, Pricepally allows people to buy quality
produce and wholesale products directly from producers or local farmers.
Customers also have the option to pool their resources and share bulk
purchases with other users for additional savings.

 

The service has been a hit. Now the company is working with Prosper Africa
—the U.S. Government initiative to increase trade and investment between
African nations and the United States—to connect with U.S. investors and
fuel additional growth.

Rapid Growth

 

Pricepally launched in late 2019 and quickly proved its worth. Customers
recognized the service's value and convenience, especially in the face of
high inflation.

 

Only a few months later, when the COVID-19 pandemic hit, users also valued
having a safe, affordable way to get the essentials they needed.

 

"People were scared to go out because of COVID-19," says Pricepally COO
Jummai Abalaka, and the company's model met the needs of the moment. "The
business was able to get the license from the government to be able to move
around during COVID-19 lockdowns and restrictions," she says.

 

The company rapidly expanded to operate in both Lagos and Abuja, doubled its
workforce from seven to 14 employees, and grew its user base to serve more
than 5,000 customers each month.

With its next round of investment, Pricepally seeks to improve its
warehousing and processing facilities and hire additional tech talent so it
can serve more customers.

 

"In the next five to ten years, we are looking to be working in many African
countries," says Pricepally Co-Founder Monsunmola Lawoyin. "We want to make
fresh food available for everyone."

 

A Win-Win For Farmers and Shoppers

 

For Nigeria's smallholder farmers, Pricepally offers a way to get their
products into the hands of customers—even in faraway cities—for a fair
price. And, over time, the company hopes to help address other challenges
that small farmers face.

 

"Farmers in Nigeria just farm to make ends meet, but going forward, we are
looking at speaking to these farmers and young people to look into farming
as a career," says Lawoyin. "In the future, we hope to train farmers and
give them the necessary tools needed to succeed in farming."

 

In addition, because Pricepally connects shoppers directly to farmers,
people who use the service can trust that the food they buy is fresh and
healthy.

 

"For transparency, Pricepally has started putting farmer's faces and short
bios on the website. Transparency gives a level of trust to the consumers,"
says Abalaka. "We make sure that what they are consuming is of good quality.
We reach out to mostly farmers who grow their products organically. A lot of
people are becoming aware of their health, and they are making sure they are
eating organic produce and are careful of what they eat."

 

Pricepally is well positioned to meet the changing needs and shopping
behaviors of its customer base. By bridging the gap between farmers and
consumers, it offers a smarter and safer way to shop. As it grows, it could
help transform the food and agriculture sector in Nigeria and beyond. The
big question is: Which investors want to come along for the ride?

 

 

Elon Musk hits back at 'despicable' attacks against him after claims he
'propositioned SpaceX flight attendant for sex, exposed himself and offered
to buy her a horse in exchange for an erotic massage'

Elon Musk hit back at his critics and said a series of salacious sexual
harassment allegations revealed Thursday were a 'despicable' attack
motivated by politics amid his $44 billion takeover of Twitter.

 

The bombshell report, published by Insider, alleged that Musk's SpaceX paid
$250,000 in severance to one of the company's corporate flight attendants
after she filed a formal complaint against the tech mogul claiming he
exposed himself to her and propositioned her for sex.

 

The flight attendant, who has not been named, also alleged the billionaire
rubbed her leg and offered her gifts - including a horse - in exchange for
an erotic massage. 

 

The story was based on declaration papers signed by a friend of the flight
attendant as part of the complaint against SpaceX. Other records and
correspondence were also turned over by the friend.

 

Musk tweeted Thursday night: 'The attacks against me should be viewed
through a political lens - this is their standard (despicable) playbook -
but nothing will deter me from fighting for a good future and your right to
free speech.'

 

He then finally tweeted a denial in response to Cucumber Capital CEO Tara
Bull: 'And, for the record, those wild accusations are utterly untrue.' 

 

He also attacked the credibility of the alleged victim's friend, tweeting
that she 'is a far left activist/actress in LA with a major political axe to
grind.'

 

The Tesla boss is currently trying to buy Twitter has recently made a public
display of switching political allegiances - saying he will vote Republican
this year after having voted for Democrats in the past.

 

 

Musk, the wealthiest man on earth, hit back in a statement to the
publication, saying there is 'a lot more to this story' - which he called a
'politically motivated hit piece'.

 

He later decried the journalist's tactics on Twitter.

 

'It was clear that their only goal was a hit price [sic] to interfere with
the Twitter acquisition,' he wrote. 'The story was written before they even
talked to me.'

 

 

 

Analyst Warns Of A Fuel Shortage Crisis In The U.S.

Very low inventories of oil products in the United States and a shortage of
refining capacity have laid the foundations for an oil shortage crisis in
the United States this summer, Paul Sankey, Lead Analyst at Sankey Research,
told CNBC in an interview on Thursday.  

 

"I just don't think there's anything the Administration can do about it,"
Sankey said, referring to the fact that a refinery cannot be built in time
to ease the gasoline and diesel crunch.

 

Asked about what would happen if an operating refinery were to stop
production because of an accident or a hurricane, Sankey said, "we're on the
verge of a U.S. oil crisis as it is, obviously what I'm talking about is
shortages."

 

"We've never seen inventories this low, particularly in the northeast. We
haven't seen gasoline this low at this time of year in history," the analyst
added.

 

With the hurricane season later in the year, "We might have a crisis this
summer, I'm telling you," Sankey said.

 

There is a global shortage of refining capacity, and currently the energy
world "is completely insane", he noted.  

 

Earlier this month, Saudi Arabia's Energy Minister, Prince Abdulaziz bin
Salman, said that insufficient investment in global refining capacity is one
of the key drivers of the global rally in gasoline, diesel, and jet fuel
prices.

 

There isn't a quick fix for all-time high fuel prices in America— or
elsewhere — analysts say. The quickest fix is not one that American
consumers would want — a recession that would lead to job losses.

 

Some 1 million barrels per day (bpd) of refinery capacity in America has
been shut permanently since the start of the pandemic. In the U.S., operable
refinery capacity was at just over 18 million bpd in 2021, the lowest since
2015, per EIA data. Rising demand since economies reopened and people
returned to travel, combined with lower refining capacity and very tight
distillate markets have drawn down U.S. product inventories to below
seasonal averages and at multi-year lows, with record-low inventories
reported on the East Coast.-Oilprice.com

 

 

 

UK inflation hits a 40-year high. So what next?

Input costs at the Salt and Vinegar fish and chip shop in southwestern
London have surged. Much of their white fish comes from Russian vessels that
now face tariffs. Sunflower oil for the deep fryer is sourced from Ukraine,
which is struggling to get its product to market. The costs of salt, wheat
for batter, and of course energy bills are all going up fast.

 

Manager Asem Kibria says it's a perfect storm. "The price of our fish has
gone up maybe 40 or 50 percent – oil has doubled from what we used to pay,"
he tells CGTN. Above him is the price board which, for now, remains
unchanged. "I couldn't do that to our customers," Kibria insists. "They are
struggling as well."

 

UK inflation hit nine percent in April. That's the highest level in more
than 40 years, and it's almost double what the Bank of England was
forecasting only six months ago. 

 

Britain's fish and chip shops are being particularly hard-hit, but rapidly
rising prices coupled with weak economic growth are going to hurt every
single business and household in the country. Even before the crisis in
Ukraine, supply shortages had been causing pricing headaches. 

 

 

Recession fears amid paucity of policy options

 

The conflict has made things a lot worse. Amid startling headlines about
what could be to come, banking officials warn they may have to keep putting
up interest rates in an attempt to cool things down, perhaps even if that
stokes a recession.

 

Critics say they could have acted sooner. But at a parliamentary committee
on Tuesday, Bank of England governor Andrew Bailey said no one could have
predicted the events of the last few months. 

 

"There's really no sensible monetary policy which could have been put in
place a year or two ago that could have kept inflation at the 2-percent
target this year," said Michael Saunders from the Bank's Monetary Policy
Committee, who sat next to Bailey during Monday's session.

 

Having spent so much to prop the economy up during the pandemic, the British
government has shown reluctance to provide extra support. But on Wednesday,
Prime Minister Boris Johnson appeared to change course, telling parliament
he would look at "all measures" necessary to see people through this
difficult period.

 

 

UK finance minister Rishi Sunak (R) has been unwilling to sign off financial
support – but PM Boris Johnson seems open to "all measures." /AFP

 

Central to the debate about easing the pain is the idea of a windfall tax on
energy companies whose profits have soared as prices have risen. Johnson
continues to resist pressure from opposition parties. "The downside is it
could prevent oil companies investing in the transition to renewables," said
Michael Hewson from CMC Markets. Hewson backs the idea of further tax cuts
beyond the five-pence cut on energy duties introduced earlier this year.

 

Government officials point to the UK's unemployment rate as a positive sign.
It is now at its lowest level in half a century, according to figures
released this week.

 

However, that's largely due to a scarcity of workers that is also driving
inflation, which is forecast to hit more than 10 percent later this year.
For many, including the nation's fish and chip shops, that will be
absolutely crippling.

 

 

 

Sarb hikes repo rate by 50bpsIn the wake of spiking global inflation.

The South African Reserve Bank (Sarb) hiked the repo rate by 50 basis points
(bps) on Thursday, the steepest increase since 2016.

 

Spiking global inflation fuelled the move, which takes the bank’s key rate
to 4.75% and the prime lending rate of commercial banks to 8.25%.

Read: Petrol price horror

 

Sarb Governor Lesetja Kganyago announced the rate hike on Thursday,
following the conclusion of the bank’s May Monetary Policy Committee (MPC)
meeting. The hike was expected by a slight majority of economists ahead of
the meeting, especially after the US hiked its key rate by the same margin
last month.

 

He said four members of the MPC voted for a 50bps hike, while one member
voted for an increase of 25bps.

 

The central bank’s forecast for headline inflation has been revised higher
to 5.9% for 2022, due to higher fuel and food prices.

 

“The risks to the inflation outlook are assessed to the upside. Global
producer price and food price inflation continued to surprise higher in
recent months and may do so again,” said Kganyago.

 

“Russia’s war in the Ukraine is likely to persist for the rest of this year
and may have significant further effects on global prices. Oil prices
increased strongly from the start of the war and may rise more as stresses
in energy markets intensify,” he warned.

 

#MPCMay22 The SARB's MPC has decided to increase the repurchase rate by 50
basis points to 4.75% per year, with effect from the 20th of May 2022.
pic.twitter.com/3EwPylORCH

 

— SA Reserve Bank (@SAReserveBank) May 19, 2022

 

Kganyago said the bank’s GPD forecast for 2022 has been revised down to
1.7%, from the 2% forecast cited in March following the last MPC meeting.

 

The governor listed short-term negative impacts of the KwaZulu-Natal floods
in April and ongoing energy supply issues (load shedding) as contributing
factors to the downward revision in the Sarb’s GDP forecast.

 

Meanwhile, Kganyago conceded that headline inflation is expected to breach
the target range (Sarb’s 3% to 6%) in the second quarter of this year.

 

He noted that, in the near-term, headline inflation “has increased well
above the mid-point of the

inflation target band”.

 

#MPCMay22 The Bank’s forecast of headline inflation for this year is revised
higher to 5.9% (from 5.8%), primarily due to the higher food and fuel
prices. pic.twitter.com/DSRYSRgEB6

 

— SA Reserve Bank (@SAReserveBank) May 19, 2022

 

“Against this backdrop, the MPC decided to increase the repurchase rate by
50bps to 4.75% per year, with effect from the 20 of May 2022,” he said.

 

“Current repurchase rate levels reflect an accommodative policy stance
through the forecast period, keeping financial conditions supportive of
credit demand as the economy continues to recover,” he added.

 

Despite the 50bps hike, Kganyago reiterated that the implied policy rate
path of the Sarb’s Quarterly Projection Model still indicates a “gradual
normalisation” through to 2024 “given the inflation forecast”.

 

Commenting on the repo rate decision, Pam Golding Property Group CEO Dr
Andrew Golding, said while he hoped for a lower 25bps increase, the 50bps
hike comes amidst “resurgent inflation” globally.

 

“In the wake of the [US] Fed’s recent 50bps interest rate hike and the rapid
normalisation of monetary policy globally, together with rising oil prices
and renewed weakness in the rand, it seemed inevitable that this would be
the fourth consecutive MPC meeting at which an interest rate hike would be
announced,” he noted.

 

Home loan and residential property impact

 

Golding said that the impact on SA’s residential housing market is not
expected to be significant, especially as this is still the lowest level of
prime interest rates in more than two decades (prime was 8.5% between July
2012 and December 2013).

 

“For example, for a [homeowner] with a bond of R1 million over 20 years, and
a prime rate of 8.25%, payments will increase from R8 209 per month to R8
521.”

 

“It is too early to forecast if the gradual upward repo rate cycle will have
any significant impact on [residential property] market activity.”

 

FNB commercial property economist John Loos, however, warns that the
commercial market is likely to feel the impact.

 

“A more significant 50bps hike, after three 25bps worth of rate hikes at
prior meetings, leads us to expect that we may see some renewed slowdown in
sales activity in the commercial property sector in the second half of
2022,” he said.

 

Loos added that recent declines in vacancy rates may stall on the back of a
stalling in demand growth for new commercial space.

 

“We also expect this ongoing rate hiking to keep average commercial property
capital value growth at low single digits, translating into negative growth
in real [inflation-adjusted] terms,” he said.

 

 

 

 

 

 

 

 

 

 

 

 


 


 


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Bulls n Bears 

 

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

 

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
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any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 


 

 


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